New Irish telecom firm bemoans lack of institutional support

STENTOR, a new Irish telecommunications company, which is listing on London's Alternative Investment Market, has bemoaned the lack of Irish institutional involvement in the placing.

Stentor will be joining the market on April 29th through a placing of 5,285,715 shares at 72p a share. However, no Irish institution is involved and few Irish private investors have put up any money.

The company, which is hooked up with US giant telecommunications company AT&T, will not be competing with low cost call providers but will instead be offering a "managed telephone network". This makes it the first in the market to offer an advanced complete calls network, according to Mr Dan O'Neill, the chairman.

This type of service is becoming the norm in the US but has yet to catch on in the far more regulated European telecommunications markets, he added.

London brokers Shaw & Co says it is very optimistic for the company. "The four of us on the desk have opted for warrants in lieu of part of our fees, we are so bullish," said Mr Alaisdair Macleod, a broker at the company. Mr Macleod predicted the share price had the potential to rise 50 per cent from the placing and "possibly more" if the company could announce major contracts within three to six months.

However, the brokers noted that the lack of domestic institutional interest made it more difficult to place the shares. The Irish institutions are even more conservative than those in London and across Europe, one broker said.

Mr Patrick Cruise O'Brien, son of Dr Conor Cruise O'Brien, and Mr Richard Donworth, the cofounders, said this was because of the perceived risk of a start up situation in Ireland.

Almost 65 per cent of the £3.8 million sterling raised (£3.3 million net) has come from institutions from Britain to Germany and Austria to Switzerland. "As we get going we would like Irish institutional involvement," said Mr Donworth. "It would be much nicer to raise money here."